On Wednesday, Argo Blockchain announced that it was selling its Helios facility, which is based in Dickens County, Texas, to Galaxy Digital Holdings.
The bitcoin mining firm announced that it had agreed to a deal with Galaxy worth $65 million, and Argo’s mining machines that are located at the facility in question will be hosted by Galaxy.
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The deal also includes Galaxy offering a new asset-backed loan to Argo Blockchain, which will have a principal amount of $35 million and will initially be for 36 months.
As far as the collateral for the loan is concerned, the Helios facility currently has 23,619 Bitmain S19J Pro mining machines that will be used for this purpose, along with some machines that are located at the company’s data centers.
During the course of the year, the stock price of Argo Blockchain has plunged 90% due to the declining prices of bitcoin and the rise in energy costs.
In order to deal with its financial problems, Argo Blockchain first sold some of its Bitcoin reserves this year in June and earmarked the capital to pay off its operating expenses.
The company had also been looking into conducting a funding round for $27 million, but plans had fallen through in October.
On Tuesday, the company informed that it had an important announcement to make on Wednesday, so it requested that trading of its unsecured notes and its shares be paused on the NASDAQ stock exchange.
The company also announced on Wednesday that it will repay some of its existing debts with the cash proceeds that it would receive for the sale of the facility in Texas.
Some of the funds of the new loan will also be used, as Argo Blockchain also intends to pay off its prepayment interest as well as its fees of $84 million that it owes to NYDIQ.
Plus, it will also pay off North Mill Commercial Finance, which it owes about $1 million. Peter Wall, the chief executive of Argo Blockchain, also talked about the deal.
He said that the deal with Galaxy would transform Argo and would benefit the firm in a number of ways. He said that they would be able to reduce their debts by almost $41 million.
The CEO also said that it would help the company boost its liquidity and strengthen its balance, which would enable them to continue its operations despite the ongoing bear market.
Argo said that it would now shift its focus on optimizing and expanding its operations at the two data centers of the company located in Quebec, which runs on low-cost hydroelectricity.
The Mirabel and Baie-Comeau facilities of the company have a power capacity of 5MW and 15MW, respectively, and its hashrate capacity is around 140 PH/s.
Since it has announced the agreement, it also indicates that Argo Blockchain will not publish the results of the third quarter of the year for now.
Since the UK is its home market, the FCA requires financial results to be reported twice a year.